Lululemon Stock, Retail Sentiment Slide Ahead of Q4 Print As Investors Await Clarity On Tariff Impact
Analysts in recent days have flagged improved business in the Americas and gains from its seasonal newness strategy.
FollowLululemon Athletica Inc. (LULU) fell 0.4% in after-market trading hours on Wednesday, after ending the day's regular session marginally higher, ahead of the company's quarterly earnings report the next day.
The athletic apparel retailer is expected to report fourth-quarter adjusted sales of $3.6 billion, 12% higher than a year ago, according to estimates from Koyfin.
Adjusted earnings per share is seen rising to $5.87 from $5.29.
Investors will closely watch for Lulemon’s earnings forecast and commentary on how the new U.S. import tariffs – and potential reciprocal tariffs – are expected to affect its business.
In a note on Wednesday, TD Cowen maintained its price target of $445 and 'buy' rating on company shares, according to Investing.com.
The research firm flagged the company's improved sales in the Americas and expectations of a conservative yet achievable forecast.
Needham lowered its PT to $430 from $475 while maintaining a 'buy' rating and gave a satisfactory view of the company's strategy around seasonal newness.
In the retail business, "newness" refers to seasonal updates in the product lineup.
On Stocktwits, the sentiment dropped from 'bullish' to 'neutral', while the message volume jumped to 'extremely high'.
A bullish user said Lulemon could be somewhat shielded from the tariffs.
"Majority of their products are made in Vietnam, Cambodia, Sri Lanka, Indonesia, Bangladesh, not China. Reciprocal tariffs against those countries will hurt their bottom line in America, but this could be offset by their increasing sales in China," this person said.
A few users pointed out that Lululemon is a Canadian firm, with one saying that the company risks a boycott in the U.S., its largest market, should Canada announce reciprocal tariffs.
Shares of LULU are down 11.7% year to date. The company will report earnings after the markets close on Thursday.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here.
